Volume 21, Number 2 Article by B K Datta June, 2009
BPCL Supply Chain Optimisation: Building a New Approach :
Bharat Petroleum Corporation Ltd, a Navaratna public sector undertaking and a Fortune 500 company, formed the Supply Chain Optimisation(SCO) department in November 2006 with the strategic intent of maximising benefit for the overall corporation, improving dynamic capability and becoming more competitive in the total business process chain.This paper discusses the six core supply chain business processes that the SCO looks after, their linkages and development, and the SCO operating model, with an added focus on key practices that drive success in a highly complex environment.
Given its objectives, the SCO has to work through four fundamental sets of complexities. Firstly, it operates in a global context both at the supply side, and at the marketing end. The crude selection and supply is the international arm of the business, and the supply chain needs to drive decisions on exports imports versus domestic sales of different products. Secondly, the SCO inherently operates as a matrix organisation, working across different business units that could have conflicting goals or are used to more vertical ways of working. Thirdly, the SCO needs to drive value creation for the entire corporation, by creating a sense of passion for the company goal. Fourthly, short-term versus long term implications of decisions need to be balanced, from a strategic perspective.
The success of this initiative may be attributed to multiple practices. The focus on development is through a simple and integrated process using industry proven solutions and technology tools. The SCO team has been handpicked from a pool of not just high performers but those who can work collaboratively in a matrix organisation, towards success.
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